Last week, Google announced the launch of it’s new Adwords feature, that they have introduced to increase the transparency of the paid search auction to give advertisers more insight into how their keyword bids are affecting the number of impressions and clicks their ads receive, called the Bid Simulator.

This new feature allows users to see how the number of impressions and clicks could be affected if they were to increase or decrease their keyword bids. The feature works by collecting and analysing data from the previous 7 days and using that information to predict the number of impressions could have been with a different keyword bid.

This new tool has been designed to allow advertisers to see how their campaigns could potentially be optimised by changing their keyword bids, but can also be useful to see if the current bids are at the correct level and that actually increasing the bids by a vast amount wouldn’t make a great deal of difference to their potential traffic.

The new feature shows advertisers, not only how many impressions could be achieved with increased bids but also how many additional clicks they could result in and the total increased cost of those additional clicks at the increased cost-per-click.

This will allow advertisers to estimate whether or not an increase in keyword bids could have a positive affect on their traffic and more importantly how the increased traffic, but also increased costs could affect their overall return on investment.

However, we are reminded that this tool is only a simulator and the predictions given are not recommendations, they are simply projection models. Also that past performances cannot guarantee future results so the simulations should not be taken as exact, they are simply predictions.

The new tool could help advertisers to make more informed decisions when it comes to keyword bidding, which until now has typically been determined by a lot of trial and error. The new feature increases the transparency of Google Adwords and provides new insight into the auction, which can never be a bad thing, but we must remember to take the predictions with a pinch of salt like most of Google’s projections.